that's the scene in greece and so will the rest of the world the following it's a real concern these days and just one of many challenges you i.m.f. chief christine lagarde will inherit so how will she shape the global landscape doesn't shape her first. really good serve on the problem of real need in the food . nato backfire libya's civilians call for an end to nato campaign with the bombs a betrayal drowning out their voices the president does not have power under the

constitution big unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation about senator reading a quote so who said it well actually then senator barack obama so why has the change of heart over libya and what the members of congress say about it. it's tuesday june twenty eighth i'm christine for sal in washington d.c. we're watching our team. starting off today the torch has been passed french finance minister christine lagarde has been confirmed as the new head of the international monetary fund she is of course replacing dominique strauss kahn charged with sexually assaulting a maid at a new york hotel last month now this of course is a pred stressed you just position but let's get to the nitty gritty here and talk about what the world will talk about the world but look guard inherits and want to

look. it's like. well here's one view in greece today and for much of the last year riots in the street people fighting and dying and demonstrating against the government many there believe has failed them unemployment in greece now about sixteen percent financing by banks at a standstill as the debate continues over austerity measures and more worry and speculation that as goes greece so goes the rest of the world also here in the united states the middle class continues to suffer evidence of that just about everywhere you look of course here in washington we've got talks about the debt ceiling going nowhere fast and so we've got kelly evans is the columnist for the wall street journal she's in new york and joins us from our studio. hey there kelly pretty difficult to envy christine lagarde coming into this position at this time i

don't want to rain on a one anyone's parade but i do want to paint a realistic picture here and talk about look guards at greatest challenges and ask you what you think will be. i think we just saw images of her greatest challenge certainly it's a reassurance to be europeans that having a fellow european and as the head of the i.m.f. will basically keep the recovery package on track some of the demands on track to the entire euro zone has for greece in order to support the bailout measures there but you know dominique strauss kahn was seen as helping these negotiations kind of stayed together throughout his tenure at the i.m.f. they're in an especially difficult spot as you can see from from people on the streets in greece there's very little appetite for the kinds of austerity measures that the guy in that is looking to push through and so it's going to be the extremely difficult political balance that she will now have to strike although having someone again who's european christine lagarde has been involved in these talks. in her position with the french and otherwise for years now walker some

reassurance that there's not going to be any sort of major break with what's happened so far let's also talk about what's going on here in the united states a lot of people say you know the u.s. congress maybe they're just not aware of the extent to which the middle class is suffering how can we blame them if they don't know what's going on well last week we we saw that they actually do know what's going on the senate committee on health education labor and pensions held a hearing in which they did hear about what some members of the middle class are going through their frustration i want to play a little bit about what was said at this hearing and then get your take we know that money talks around here and that means you don't hear us no question the great recession made put even more downward pressure on the living standards of the middle class but for many in the middle class the downturn presented a new problem on top of the old one and we need action words and home promises will no longer work we read that the wealthy get bigger tax breaks and hopes that their

money will trickle down to us and then we turn the page and read about how our school districts are forced to cut staff again. all right so some awareness at least being raised but i'm wondering kelly if you see this leading to any change. well i think we have to be clear about what we're talking about it's hard to even talk about the middle class in the us anymore there's been a big concentration in wealth and in spending power towards the upper end but at the same time the lower end the number of people who are on food stamps and who are otherwise struggling extremely has also increased so it's really squeezed out what was once thought of as this kind of broad middle class so the real question i guess not so much for politicians but for all of us going forward is what does that really mean for the u.s. economy and unfortunately i think this concept of the great recession was the period of most suffering and we'd be sort of gradually recovering it's been turned on its head as people realize that in fact there's still a lot of repair that needs to be done to balance sheets as they were destroyed and damaged during the recession but also during the proceeding events that led up to

it there's a lot of questions about how sustainable incomes are at this point you know keep in mind average household income in the u.s. is only going to rising over the last thirty years because females have been basically going to work and so now that starting to flatten out as well as these really worrisome long term trends i think you need to be you know thought about the problems very easy to sort of just point and say the middle class is suffering and it's a lot harder to figure out exactly why they're suffering and what should be done about it and certainly president obama talks a lot about what should be done about it and it you know it's pretty interesting when you look at where the president has been just in the last month traveling around the country visiting quite a few manufacturing plants even today he was at the alcoa plant in iowa talking time and time again about the role of manufacturing in this country when you talk about the middle class that's certainly a role that they've played no i certainly agree i think most people would that obama talks about the need for infrastructure roads and bridges but also right now

we're seeing the new san francisco oakland bay bridge being sent to the bay area in pieces from china will be put together there of course but essentially one of the best examples of new infrastructure here in the united states has a made in china label on it so my question to you is how can the president save manufacturing here when it's simply not cost effective for most companies to use native american products. well you highlighted the problem the challenge are there so there's sort of two things going on the first obviously is that we want to see more of the kinds of jobs in manufacturing and otherwise that we once that once from the basis for sort of the middle class i think it's very encouraging to hear a lot of people talking about the need to really go into these vocations you know to talk about the need for plumbers and you know people in manufacturing in sort of trying to restore some dignity to that to these blue collar jobs that have really fallen by the wayside and now we're left with a lot of service sector workers whose skills are a lot less tangible but anyway so that's that's one issue so i think the more you

can use the bully pulpit to call attention to this sure the better but at the same time a lot of states municipalities and private sector companies are still under you know enormous financial pressure so what they're looking to do is minimize costs and still the way to minimize costs it's to go to china or to go to asia or to go to some of these lower cost nations to produce that so. our hands about income levels in the u.s. we have to be reminded that one of the reasons why things are still being made overseas is because we still have a higher cost of labor here than they do abroad so there's still the problem is if you want that bridge made you know here in the u.s. you have to find a way of making it cost effective so that states and municipalities as we've seen are so squeezed especially heading into their next fiscal year right now in new jersey just this morning taking out or is looking to take out a line of credit to help pay its bills you've got to keep in mind there are sort of two factors working here working against each other actually right now some really important points that you raise you know it's really interesting to the chinese prime minister is it touring around europe right now he's offered to buy some of

their debt he actually spoke to author and investor jim rogers about what this could mean this potential new friendship between some of the european countries and china so i want real quick to play a part of what he said and then i'll have you weigh in. to pay become the savior they become the largest creditor for europe and they're going to have a very major seat at the table that's going to improve their position in the i.m.f. it's going to produce improved their position with the world bank it's going to improve their position if you win because you know the europeans are going to have to be more and more friendly to china because china saving america not cannot save them and so on my question to you just what does this new friendship that well and have we probably happen. i think china sees an opportunity here i think that they're looking to strengthen a lot of those regional ties and basically assert themselves as a key part of trade for the european sector but remember there's no free lunch here

if there was such a great opportunity in europe right now other people would be chasing it the risk for china being as much as it extends its arms and sort of puts its money where its mouth is should conditions really worsen in europe should a lot of the investment that they're making go south they will be left holding the bag and so there's a reason why other companies or other countries aren't stepping in as much right now as china is so you can give them credit for basically trying to use this moment to really strengthen their own importance in the region the flip side just being you have to keep an eye as conditions in europe are so fragile right now what a worsening across that sector would actually do to a lot of the investments trying to house and by extension what that means for investments trying to might have elsewhere and the strength of its own economy and certainly appreciate your take i know you're on the front lines of a lot of these financial stories kelly evans columnist for the wall street journal thanks so much and. i want to turn now to some breaking news out of afghanistan that's where reports say at least one suicide bomber has blown himself up at a western style hotel in kabul this hotel the intercontinental

a symbol of western culture in afghanistan it stands on its own mountain has many checkpoints it's considered probably the safest place in kabul next to the embassy and residential palace this host hotel is used by western journalists during the u.s. led invasion of afghanistan during two thousand and one has been targeted before we are getting more details about this attack that is still seems to be underway and we'll bring you the latest developments as they become available. turning now president obama entrenched in talks with top senate leaders on the debt kicking off a pair of meetings yesterday of course these leaders and the president trying to resolve the stalemate on raising the country's debt ceiling that now by the way fourteen point three trillion dollars so far. nothing has worked and with the looming august second deadline there is worry that it just won't happen some saying it shouldn't happen and still others saying you know this is all a big show designed by politicians who want to play to their bases while pushing

the problem to the last minute when we really are backed into a corner artie's lauren lyster spoke to dean baker about this he's the co-director of the center for economic policy research she wanted him to start with his take on what exactly is going on here. well it flew through a political theater and certainly one senator walked out last week said their campaign has tax increases that close political theater i'm sure planned long time in advance the king knew it happened so those obviously theater and they know there's no way out they're going to have an agreement with president obama that doesn't involve some type of tax increase whatever they want to call it it's going to have to involve some some revenue increases if arts theatre the actually making progress i guess they will because you know i think end of the day they are going to have to have a deal so you can vision there's two two scenarios basically one is that they come to some sort of deal in the not too distant future the alternative is you actually get to the state run in oregon second and it's a hard and fast deadline but somewhere there are about and that point secretary

geithner personally make some statements saying look we owe x. tens of billions of dollars have to be paid three days there's no money in the bank i can't pay that and it definitely the financial markets go nuts so does just like what happened when the chart was voted down the first time it's app on the wall street people are scared to death this story coiling speaker boehner cantor mcconnell said you better pass something or this is it and my guess is that point they go running back i would have done this so august third we're going to see have you found that in the meantime it does sound like a few things have changed there are some reports there was a report in a washington post today that republican leaders are actually looking at one of their sacred cows that they may look at military spending is different than is something that can be cut do you think we will actually see them significant defense cuts would that be possible well i think that definitely will be cuts in the military budget question how significant so i don't think there's any doubt they will agree because the military the question is whether they really are are sizable or whether they're primarily for show i mean there's

a lot what do you think do you think that this is going to be significant we have a whole lot of debt we have you know very large deficit we need to cut more than forty billion dollars here or there to to make any difference i'm sure will i mean part of the story is you know what's the baseline in terms of the. terry defense cuts so we've increased military spending a huge amount because of the wars in iraq and afghanistan and presumably we are getting our troops out of there whatever pace so that does mean less military spending so they'll be a lot of associated with the n.b.a. or winding down of those wars that we go beyond that i kind of doubt that so we will see some cuts that will be true feel but they're the sort of cuts that you'd expect from the ending of those wars but the other thing to keep in mind is they're just running the numbers so they can write down any number they want for you know what they think we're going to spend in two thousand and fifteen sixteen seventeen that doesn't tie as to so we might get a situation where we get a lot of cuts that are written into law today that says some extent or joke that everyone knows we're going to actually see picking up predictions and what you know

estimates are first spending this estimate of the debt has it one hundred twenty trillion when you add up all of the expected unfunded. entitlements when you look at the debt that is owed to all of the people that invest in u.s. debt which is the chinese government is this really that our situation we're looking at is i mean not a studio report that is just one hundred twenty trillion is essentially you know where you get say suppose that would pay out everything that people get so security benefits and we don't count the taxes pay out everything when people are scheduled to get medicare benefits we don't count the tax receipts closely number in other words if you want to go to france cure people you put together a number like that but it's really not the sort of thing anyone's done to take seriously the c.d.o. you're not know this is a video well see below is probably asked to do this by members of congress and c.b.s. does what they're told so you think this is political it's political it's nonsense all right well i want to talk a little bit about another item as far as what is the state of the economy i want

to bring up what analysis someone recently had the president of u.b.s. america he said this he said since i sat here a year ago we have two million jobs that have been created exports have gone up ten percent and technology is booming agriculture is booming. but when you look at the t.v. you hear what we are not doing well i believe we have built a foundation and are on the right path now i have seen where u.b.s. is in new york as i work there and a sun a cushy street and i'm sure he has a very cushy office and i'm sure new york looks like things are improving from where he says i'm curious if you know as we're sitting here talking about the debt and the possible unfunded liabilities that are even more than what we typically hear on the t.v. that he is talking about what do you think that the situation in the economy really is with the good it's not new at the time of day i mean this is really kind of a charade in some fortune wasting time talking about the real situation not a charade how would you know we would be going into the financial markets don't get

rid of financial markets we would say well in the united states money are three percent interest the long term it shows they don't care or will that when you argue that that is in part because of the federal reserve policy of quantitative easing and bond buy back but just that interest rates alone are scheduled to end on june thirtieth maybe lower to play twenty thirty basis points most of the positions and you do the markets know what incentives you through it's already written back after the yes exactly no but you know june thirtieth comes this week ok so that doesn't make any difference but how does the denominator and i mean you because it isn't any better than interest in japanese that you're getting may start us off treasuries are you now to them asking them to sort of treasuries you want them to raise the value of their currency against the dollar how would they do that they would so off the dollar building so they were actually doing what we're asking them to do and that was dean baker co-director of the center for economic and policy research with our own moralists are. turning now to libya were many libyans say you know national criminal courts arrest warrant for moammar gadhafi it's all just a cover for nato attempts to kill colonel gadhafi but he also calling for nato

leaders to be held accountable for their actions to the violence and devastation continues there are to correspondent more if an ocean is just one of the few of our reporters on the ground there and has more on what this all means. the road from the capital chiefly to do. is lined with the aftermath of war towns abandoned as the population fled the balkan and. this is what's left of the airport in the siege of. homes of one of the country's key oil refineries the last plane to go from this runway just hours before it was hate. to say so it's only heating the targets of military value state these telecommunications power to stop it out of its troy in a tight spot this is a safe way to strikes and they've also accidentally. two cars and killed two civilians been found there is no t.v.

in this area as we can speak oh my god has also been disrupted. there is no water and know. what used to be happen this man says has become hell was his home now susan familiar with other b.b.b. i have nine children and i send them all to my relatives abroad i don't want them to see their mother was in such a condition to leave from least small paul not far from drug even gas used to flow to europe. we used to produce fields ascended to them and now see they destroy it all this is terrible and ridiculous at the same time. the closer you get to the front line the more you feel it you can hear the war and you can even read it on the. jobs just before the bomb surviving. this runs has as you can see the reason i am a big nato is here leave it to enforce and i'll fly zone over the country to

protect civilians on the other side there is another side also in arabic saying that nato can attack any place at any time. any time happened three times over several hours while we were filming. regulators major is where the frontline rise divided the country to two parts into to see the inside is going to break one flashpoint within the rebels and gadhafi forces it's a very important point to kick location it's in a firm hand on this town would mean taking control over the country's economy. also seemed to be a rare target of nato bombs never land on. population can hardly skate. they were like my family that had just gone to the shop to buy some foods and this happened six of them died i couldn't believe it. and this used to be a restaurant for all companies start where friends gathered after work we were

eating with my colleagues and there was a boom we knew what that was we run we try to help those who are strapped then the helicopters came too and stilted to shoot us as if they didn't want us to save our friends. from one street to another the stories are repeated. by our problem alone. and in the food. there's a man every day every day begging and they killed our civilians. from this country this is probably libya well those voices become more and more frequent as the sound of exploding bombs and warplanes a glancing. out t. three police. all right so this decision to go into libya in the first place it's become the center of conversation here in washington it's become both political issue and a point of contention in the power struggle between the legislative and executive

branches that this morning there was a hearing on the matter with senators on both sides of the aisle questioning the state department's top lawyer harold koh here's the deal cole is urging u.s. lawmakers to vote for a resolution authorizing the u.s. role in the nato led mission in libya lawmakers say under the war powers resolution president obama should have come to congress for authorization in the first place a long time ago here's one senator who used brock obama's own words during his questioning i want to give you a quote from then senator obama in december of two thousand and seven and he said quote the president does not have power under the constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation in quote i've heard a discussion of it can you give me a simple answer is that still his position question a lot of people are asking of course regarding libya lots of talk about and some

more i want to bring in d.-day for shot from hartford connecticut he's the director of international studies at trinity college in hartford. hey there and there you are i want to talk about some of the key arguments the obama administration it made today at this hearing i know a lot of people have been waiting for to hear how they would lay this out on the table basically they said the mission in libya is limited the risk of x. as collation is limited the exposure of the armed forces is limited and so without full military engagement the war powers resolution has not been violated attorney attorney harold koh are arguing also the word hostilities should be defined by congress and by the president and of course in the historical context so the question to you is do these arguments hold any water. well i'm not at all largely because the idea of limited engagement is rather absurd to me you

know the always going to begin based on as you enter to do soon within a few hours of the war beginning with the french and american stretching libya they had already violated their narrow terms of the un resolution and now it looks like libya is simply being led there's been a hundred days about that twenty four thousand sorties you know there's a very gradual and painful reading of libya to the extent where it that these ally and then disick most of. libya is being made into what you call it giant so while you know this idea limited stinky's and you know these nominal games that i don't like hostilities you know this actually making sense. this is the second question hearing this has nothing to do with what is actually happening in libya hostility is certainly an ambiguous word to some but probably there on the ground

in libya not business as a word i want to talk about sort of how this is being defined how this is being discussed let's take in obama's action a step further i want to listen to a statement made by u.s. congressman last week and i'll get your take congress has nothing to do with the change in about whether to go to war or not and the president is becoming an absolute monarch. they don't even have affairs of my going alone without authorization by congress that the president is acting as if he can fall is king. when there's a. lawmaking exceeds obama i mean this goes back to. even you know the korean conflict but really the place you see it most is in the last twenty years the united states president has not over the last twenty years come to congress to seek authorization for a war they've been very poorly defined statements brought before congress the same thing in the punished if the united states are probably going to war in afghanistan

then it may not have been so i don't feel about the legality for instance of killing osama bin laden so you know there are a great deal of ambiguity over the last fifteen years in most of the was the united states is going to bump into into so i don't do this is the problem i see this as the problem that the united states is gotten into over the last decade i think that's an important point but i but it seems to me you know what kind of happening here is that the administration is bringing up this historical precedent and using it almost as an argument well you know you want to crack down on me well look president bush said look what reagan did. i think that's what's going on now a lot of the time in the more it goes on the more it's going to be used as well he's got to do it why can't i do what is in you know this is where you see twenty twenty hindsight is actually something that we should have benefit if bush did this

and it didn't work so well doug it may not be a bad idea to take some lessons so that you're going to do this and it didn't work out so it was sort of my idea well maybe it's a good idea to look into that as well so i would say that yes other presidents have done the same kind of thing but there is that's demonstrated for us right here that you're going to rick countries building. intensify hatred and this is particularly hard when there are very very well laid out and watched conflict butting out of places like south africa coming out of rick's countries brazil russia india china south africa so if we don't take seriously these alternatives but we get into thinking that the only solution is war making interesting figure is arguing that you should look at history and say this is a reason not to do it again i want to look i think some important point you brought out let's take a look at what's actually going on on the ground in libya now you know former cia

asset who covered libya back during lockerbie but she's coming forward with a few observations and i want to just put a few of them up on the screen and we can talk about them she says nato has been grossly deceived and should see that once protecting these rebels u.s. tax dollars are training a new taliban to intimidate the libyan people into submission or the last plunders libya as well susan lindauer a former cia asset she also says cia operatives working side by side rebel forces driving around trucks is proof that u.s. forces are already on the ground and active participants in the atrocities she says video shows several dead libyan soldiers with their throats cut lying in the back of a truck these killings violate the geneva conventions of war which protect anime soldiers after capture some pretty interesting things there these are things that no one really seems to be talking about i guess i want to get your comment on. well i would say that you know done it

a little bit of the amnesty international spent three months investigating. the fusion was reading. with it straight and she came back and said that is absolutely untrue there is no evidence but it is what she did was she spent three months investigating this claim shows. international law human rights watch i remember speed. it seems that the west has conducted this is dramatic killing of civilians so you know what i would say is that was the claim she is making a significant and the need to be investigated and i frankly don't understand how the great organizations like amnesty and human rights watch spend a lot of their resources investigating walker and by the other side but that's what i see is different but the comprehensive report about what crimes from me to and from the united states and much the same goes to the campos office at the hague book.